2004-03-13 04:00:00 PDT Washington -- The Senate voted early Friday morning to approve a $2.4 trillion budget resolution for next year that could imperil President Bush's drive to make all of his tax cuts permanent while it attempts to shrink the federal deficit faster than the White House proposes.

The vote came hours after budget deliberations broke down in the House following a rebellion by Republicans who demanded that party leaders take tougher actions to control spending. Taken together, the moves reflected apprehension among some Republicans that the deficit is gaining new currency as an election-year issue. The deficit swelled to a record $541.8 billion in 2003, according to a report by the Commerce Department.

"The budget issue is a very critical issue, and frankly, a defining issue for many members of Congress," Rep. Jeb Hensarling, R-Texas, said in an interview earlier this week. Hensarling, a freshman congressman who has emerged as a leader in efforts by conservatives to rein in what they consider unsustainable spending increases, added: "I didn't come to Congress to grow government."

The Senate passed the budget in the early morning hours on Friday on a mostly party-line vote of 51-45. But the Senate action, and the difficulty the budget is encountering in the House, betray concerns among some Republicans over the course of Bush's fiscal policy.

Most Republicans, especially those in the House, see the problem as one of spending. This week, conservative and moderate Republicans forced a delay on a committee vote on the House's proposed budget, demanding that lawmakers first craft new budget rules that would force future spending growth to be paid for with cuts in other spending.

At the White House, officials are growing tired of being blamed for failing to curb spending and of assertions that congressional proposals will cut the deficit more deeply and quickly. With the exception of military spending, they say, Congress has sought more money than the administration for legislation including airline bailouts, the farm bill, retirement benefits for military veterans, the highway bill and the energy bill.

House Republican leaders were surprised by the revolt this week. One leadership aide said that leaders felt "bamboozled" at being caught off guard and forced to delay the committee vote -- and, as a result, action on the House floor.

But Democrats wasted no time capitalizing on the dispute. "For years, many House Republicans preened as 'deficit hawks,' " said Rep. Steny Hoyer of Maryland, the No. 2 House Democrat. "But their stubborn refusal to pay for tax cuts makes any real deficit reduction a virtual impossibility."

For all of the Republicans' hand-wringing about spending, many Democrats say the principal problem is the effect the Bush tax cuts have already had.

They point out that taxes and other government receipts, as a percentage of the gross domestic product, are expected to fall to 15.7 percent this year, according to projections by the White House. That would be the lowest percentage since 1950, and a huge drop from four years ago, when receipts totaled 20.9 percent of GDP.

Sen. Kent Conrad of North Dakota, the ranking Democrat on the Senate Budget Committee, estimates that about half of that decline has been caused by the tax cuts, and the other half by the economy.

Of course, Bush and other Republicans say the tax cuts were needed to spur the economy. But some Republicans fear that the short-term economic gains from tax cuts will be frittered away.